Boris Pevzner - The Next One Billion Users: How LiveArt is Gamifying RWA Ownership In Web3

Full transcript: Boris Pevzner on London Real

3:30 This is London Real. I am Brian Rose. My guest today is Boris Pevzner, the entrepreneur, computer scientist and blockchain expert. You are the CEO and co-founder of Live Art, the world’s largest ArtFi ecosystem with over 10 million unique active wallets. Live Art drives the migration of the $2 trillion art asset class to blockchain.

4:02 Bringing the next billion users to Web3 through gamified real world asset ownership. You previously founded Collectrium, a global digital platform for managing, discovering and trading art, which was acquired by the globally renowned Christie’s Auction House. Art as an investment has outperformed stocks, gold and real estate over the past three decades. And your goal is to democratize it by bridging the gap from the legacy art world to a global crypto audience through tokenization and fractionalized ownership.

4:35 Ultimately, you believe that blockchain is creating a better world by giving everyone the opportunity to become a digital property owner and participate in the Web3 revolution. Boris, welcome to London Real. Thank you. Thank you, Brian. Great to be here.

4:51 It’s great to have you here. I want to start by saying that Live Art is one of our portfolio companies here at London Real Ventures, the world’s first media-powered investment firm, where our mission is to transform the world by investing in cutting-edge Web3 and AI companies while giving our partners marketing exposure across the London Real media platforms and academies. We heighten awareness, create customers and build communities by leveraging our global audience and extensive network.

5:15 Boris, we are super excited to be part of this journey with you. I was telling my team the other day, I am so bullish on Live Art. So let’s jump in and tell us, what is Live Art? Great. Thank you, Brian.

5:28 So Live Art, let me start by talking a little bit about the art market just a bit. So, art is a $2 trillion asset class. Very few people realize how enormous it is. And so that includes just art that is potentially tradable. Not art that’s in museums, but things that could potentially be traded.

5:48 So things in people’s collections, in galleries, in auction houses and so on. So $2 trillion. So what Live Art is doing, what our mission in life is, is to migrate this enormous asset class to blockchain. So that’s it. Not a huge story, right?

6:08 But in the process of doing it, that’s where it gets even better, bring the next billion users to Web3. Because we think that art is this wedge, it’s this vehicle, it’s a social phenomenon that everybody can relate to and can really drive this adoption of Web3 that all of us in the crypto universe and the crypto community are striving for. You just said art is a social phenomenon. That’s a really fascinating way of thinking about it. And again, you’ve worked deep in the art industry.

6:40 That’s what I think makes you super unique because there’s a lot of people in Web3 that are trying to do this, but they don’t have the background you have. A social phenomenon, can you tell me what that means? Because I think when people think of art, sometimes they think of something that they don’t have access to. They think of the auctions at Christie’s and the dinosaur thing recently went for $70 million and they think, oh, that’s those people, but I maybe don’t do that.

7:06 But it’s not really that because everybody has a relationship with art, right? For sure. And I think that especially in Web3, that is becoming more and more true. So things that we love in Web3 and sometimes make fun of and sometimes invest in. So like, for instance, memes, meme coins, meme art, just collecting memes, making fun of memes, enjoying memes.

7:29 That’s art, right? So it doesn’t have to be the Picassos and the Warhols. That’s one side of the art spectrum. The other side of the art spectrum is memes. There are lots of things in between and there is lots of creativity.

7:43 There are lots of creators. There are lots of people who are both on the creation side of art and on the, for lack of a kind of not to be too crass, consumption side of art, the consumers of art, the enjoyers of art, the collectors, the traders, the speculators, in the case of memes and meme coins, all of them are really part of the art community. And I think that an underappreciated phenomenon that is happening right now is that there is a whole, like outside of what we would call the legacy art world.

8:12 There is a whole new art world that is being born and that art world is powered by Web3, by blockchain. And that’s a completely new thing. It’s a new community and that community is already doing art-related things as in visual audio and other things that the legacy art community may not even recognize as art yet, but it will. Let’s talk about that because on your Twitter feed, there’s a picture of you and Beeple. Now Beeple is this, I guess he’s a digital artist who became very famous by selling, I think at the time, was the most expensive NFT, which was his 5,000 days or a digital artifact of, I think, 5,000 of his creations.

8:57 Is that more of what you mean by that new world or does he kind of bridge the two? He bridges the two. I think he’s one of those, there are those watershed figures in art history, I guess in any history, but in art history. He’s one of those figures. There’s a person who brought digital art into the big leagues.

9:15 So suddenly, digital art is selling at auction houses, is selling at galleries, but in a big way, at scale, with lots of zeros. So it’s really the person who probably more than anybody else has legitimized and validated digital art, which then kind of expresses itself most naturally in the blockchain and Web3 format. Why? Most naturally, because before Web3, before NFTs, before Ordinals, before all of these things, digital art was hard to make, to commercialize it because you could replicate it infinitely just like any other digital file.

9:52 And it’s that, it’s blockchain basically that gave art the ability, digital art, the ability to become a legitimate is the wrong word, an equal art form with all of the other art forms that are out there. Okay. Now, I was in this space in 21, and I saw the NFT craze, and I tried to figure out what was happening, and a lot of people said, oh, this is just silly and it’s a bubble, but it’s like, no, it’s a human phenomenon, and so what were these people trying to do?

10:25 And I remember Boris, I gave my daughter at the time, she was 17 in NFT, and I was the coolest dad on the planet. And I got more, I got more goodwill for that than if I would have bought her a car, I think. And I was giving it to people, and it meant something to them. They’re like, oh, I look at it every day, I hold it. And I was like, there’s something more going on here than just some silly bubble.

10:50 There was a new way of humans expressing themselves. This was a new medium. There was, like you said, provenance. There was, you could prove ownership. There was something going on.

10:59 Now, obviously, the NFT was kind of a craze. It was up. It was down, but now we still see now memes coming. What did you make of that NFT craze? What did we learn about ourselves?

11:11 What did we learn about blockchain? What did we learn about digital art in that process? Also, a lot of big auction houses embraced it, and I couldn’t believe it. It was like, when I think of Christie’s, I think of something that’s been around for hundreds of years, and they’re super old school doing oil paintings, and all of a sudden, they were involved in NFTs, and I was like, wow, they embraced this as well. So what did you see in that world?

11:32 Great question. There are so many angles that we could explore answering it. First of all, I have an 11-year-old who makes NFTs now, and then he displays it on a digital frame that is sitting at his desk. So he makes them. He enjoys them.

11:48 He hopefully will, with permission, trade it with his friends. We’ll see about that. But this is something that the young generation has embraced totally. To them, this is not something exotic. This is just part of their life, along with all the other things that they use, the TikTok and so on.

12:08 So this is like this culture of creation that is now married with a culture of ownership. So you could create digitally before, but you couldn’t own that digital file because it just goes and gets replicated in millions of copies. But with NFTs, with digital, with blockchain specifically, you can now own it. So this marriage of creative and ownership is where the magic happens because finally you can commercialize your digital creation in a profitable way.

12:43 But going back to your question, what did we learn about ourselves? I think that one thing that we learned is that the history keeps repeating itself. And the history is basically whenever there is new technology, usually it outpaces its use cases. And then people infuse that technology with all sorts of weird use cases and that creates a bubble. And then that bubble bursts because those weird use cases are no longer interesting to people.

13:13 And then it comes back to earth. And then the real productive use cases start filling that technology. And I think that’s what basically happened to NFTs. It got filled with all sorts of stuff. People got excited that now you can commercialize digital creations through this ownership that NFT and blockchain enables.

13:35 And then they started filling it with all sorts of weird stuff. And then some of that weird stuff became, I would say, validated art. I think that some of it is going to survive and pass the test of time, but the majority of it will not. And that’s why the bubble burst. And so now there is a new generation of content that is quality content, that’s validated content, that is the content that is going to take this vessel, which is the NFTs, and kind of start filling it with quality things.

14:11 And so I think that’s basically what we learned, that the history, it always works like this. New technology, lack of use cases, strange use cases, then crash, then real use cases. So it’s sort of the same. You know, if I may, I would extend this to Web3 and to the whole crypto universe as a whole. I think, generally speaking, it’s been overbuilt.

14:36 We have built amazing infrastructure in Web3 and in crypto. We have built all these wonderful chains and some of the blockchains do this, others do that. They all do different things and they’re all wonderful. We built wallets. We built all sorts of DeFi tools.

14:50 We can now trade. We can now do all these things with this infrastructure. But there is not much to trade. There is not much to do. There is a lack of real world use cases.

15:00 So what happens? People start filling it with other things like meme coins or whatever is the thing of the moment that people invent. I love meme coins. I invest in some of them myself. So nothing against meme coins.

15:13 But I think this phenomenon, this pattern of filling the technology that’s been, in a sense, is ahead of its time with use cases that are of questionable quality applies to Web3 and the crypto universe more broadly. I think our task, and this is basically what we come in, is to create this new quality content, create these new quality use cases to fill this wonderful infrastructure with. Yeah, I’m having a flashback to that old quote that necessity is the mother of invention.

15:48 But I’ve also heard other people turn it around and say invention is the mother of necessity. And so I think we’re seeing a bit of that. And I was around for the dot-com bubble. And I was the CFO of a company called Luxury Finder. We were selling luxury goods on the internet in 99.

16:05 And you saw, I think, a little bit of that as well. Everybody was excited. There were 18 different search engines before Google. And everybody was piling resources in there. But nobody was ready to use it.

16:17 Nobody was really ready to use the internet to buy things and do these things. And so it crashed. And, of course, five, eight, 10 years later, now everyone’s using it. Absolutely. And so it feels like something very, very similar.

16:29 Something very similar. So I’m very bullish on it. I just think that we’re in this interesting place where the technology is already amazing, but there’s not much to do with it yet. And it’s coming. There are people building it.

16:41 We are building it. There are lots of people who are going to fill this technology with super interesting content, use cases, and just things to do with it. It’s going to be great. And you believe that art is potentially going to bring that next 1 billion users. And I want to ask you how.

16:56 But I first want to say I’m having flashbacks to conversations I’ve had in this room, in that chair with Yatsu of Animoca Brands. And he always reminds us that culture is such a huge asset class that we forget about sometimes. And so everything that we wear and we do and we choose, if you think about all the products in your life, the actual utility of those things we buy is probably one tenth of the cost we pay. But we buy a brand because we kind of want to express ourselves or express allegiance, and that’s all that culture.

17:28 And that value is all locked up in what we do. And if you separate it, it’s a huge industry. And it’s part of who we are as humans to kind of express ourselves and show our interest. And it reminds me a lot of what you’re doing with art and live art. And I know Animoca’s back to you guys.

17:43 And so maybe I shouldn’t be surprised by that. How do you believe that art is going to bring the next billion people in? And how are you guys going to be able to crack it? Because it’s kind of the holy grail in this space, how to figure out art on the blockchain. Yeah.

18:00 First of all, it’s definitely worth cracking. So it’s just in itself, just art, cultural goods in general, trillions and trillions of dollars in value as an asset class, if you’d like, to use those terms. But just the art part of it is the $2 trillion. This is an enormous chunk. It’s certainly worth cracking.

18:17 But why? So why would that work? How would that work? And I think like everything else, it’ll come in stages. And some of those stages are already behind us and some are ahead of us.

18:29 So let me give you a few examples. So this NFT craze, that was the beginning, right? So that’s when some of the very famous artists, some of them we brought to market ourselves, they sort of brought to Web3 ourselves. They chose to go into Web3. So why did they choose to go into Web3?

18:48 I’m going to use an example. Yeoman Jun. So it’s one of the top 10 artists in China, one of the top 50 in the world, who is very, very successful, has been selling at Christie’s and Sotheby’s at $4 million, $7 million paintings. Very successful artist. So why would an artist like this, not just, actually, let me go back.

19:12 How do we quantify the success of an artist? You could quantify it qualitatively, right? So in major museums, the artist is just very, very generally recognized, is iconic. You could also quantify it quantitatively. And we sort of specialize in that, right?

19:29 So we have a product called Live Art Analytics that takes a quantitative lens at the art market. So you could view any artist like as if they were a brand or a company. You could look at an artist’s market cap which is the sum total of all of the artworks that that artist has sold based on the current prices, right? So that would be the market cap of an artist. So the market cap of Yeoman Jun, for instance, is $150 million.

19:57 So it’s a very substantial market cap. You know, if this were a company, that would be quite a sizable company. You could do other things, by the way. And if you go to, say, our website, liveart.io, you will see, you know, for every artist, there is a market movement, there is a momentum, there are all the financial indicators that you would expect for any other asset class except applied specifically to art. You buy art at the top and everything.

20:23 It’s kind of AI-powered. Are you guys the first to ever do something like that? I’ve never heard of a market cap for an artist. As far as I know, yes. And the reason for that is a little bit subtle.

20:33 Sorry, we’re going on the tangents, but that’s cool. I like tangents. Real conversations are tangents. Yes. So the reason that it’s possible that we can do it and nobody else could is that, you know, art fluctuates in value a lot.

20:49 So you could have bought a basket, say, 20 years ago for, you know, $10,000, and now it would be worth $20 million. Made up numbers, don’t check me on that. So it really fluctuates a lot. So if you just look at, and it also sells infrequently. So if you were to just see what things have sold in the past and add them up, you would get a random number.

21:10 That’s not what it’s about. It’s about what all of those things that have sold in the past are worth today. So you have to mark every single piece of art that has sold in the past by a given artist to mark it as of today. And that’s very difficult to do. So that’s where all that AI and machine learning comes in.

21:26 So we mark everything that has ever sold, about 10 million pieces of art that have sold in the past, to mark it every day. And then out of that, we construct, you know, perform a price history of every painting, of every artist, of every price movement, and so on. So essentially, that’s what enables it. And yeah, I believe we are the only ones doing it. But it’s like, then the reason for that is that it’s very difficult to come up with a current market value of everything that has ever sold.

21:53 If you can do that, then you can aggregate it into various art-related products, like indices and so on. But just doing that one thing is very difficult. Yeah, I mean, it seems like that alone as a company would be extremely valuable. Yes. And that’s one of many, many things you guys do.

22:09 That is true. Right. But it all has reason, because, you know, I keep saying art is an asset class, art is an asset class. But what does it mean? Well, an asset class is something that trades, that in addition to having an aesthetic value, which art, a societal value that art clearly has, also has a commercial value, which has economic value.

22:28 So that’s what makes it an asset class. But if you want this asset class to be commercially active, then people are going to want to trade it. And if people are going to want to trade it, you want to have market data. Just like with any other asset class that gets traded, be that equity or real estate or whatever, the case may be you want to have good quality, real-time market data in order to trade that asset class. So that’s why we have the data product.

22:54 Not just because we love data, which we do, but really to support all of the, it’s like the foundation of this edifice that sits on top of it, which is different things, different use cases that we can do with this asset class, in particular in Web3. Okay, okay. And so getting back to that artist you mentioned, there was this Chinese artist that had a 150 million market cap, for example. You talked about them going digital. And they did that, I think, with you.

23:25 Can you talk about how an artist that’s very successful in the traditional world would then go into Web3? And there’s also some pitfalls potentially there as well. And that’s a lot of, well, that’s a part of your business, I think, is bringing those people online. And I was wondering if you could tell people a bit about that, because it’s very interesting and you know it better than anyone that I know. Yeah, I like to think about it from the point of view of the artist.

23:50 And I think that’s probably the best way, because especially when we talk about the pitfalls. So imagine that you are an artist like this with a huge market cap, right? 150 million. That’s your market. So you have a 150 million dollar market.

24:03 And you are still creating work and you are selling into that market. There are certain price levels in your market. So the last thing you want to do is to do something that will damage your market. Because now, you know, if you damage your market and it goes down by half, next day you produce an artwork. It will be worth half of what it was before that.

24:22 That would be really, really bad. You don’t want to do that. Right, because that piece of art will be worth a half. But then when he goes to live art, his art will be marked to mark it down. And his market cap will go down to 75 million.

24:33 We don’t want to think about it. That should not happen. That never happens. We don’t want to happen, right? So if you don’t want it to happen and yet the artist wants to do something different, like, for instance, enter web 3, how do we make sure that it doesn’t happen?

24:49 That this web 3, that the entrance into web 3 extends the artist’s market incrementally rather than in any way damaging it. So if you’re an artist, this is what’s going through your mind. Not like, oh, you know, I’d like to experiment with some digital. Yeah, sure, artists love to experiment and they love new media and they love to do innovative things. Of course they do.

25:10 But first and foremost, let’s make sure it doesn’t damage my existing market. When you’re an artist at that level, this is kind of how you think about it. So therefore, failure is not an option, right? If you enter web 3, you have to enter it properly, right? You have to enter it in a way that extends the existing market and does it and doesn’t damage it.

25:30 So the methodology that we use with artists of this caliber is that we think of a digital edition, be that NFT or Ordinals on the Bitcoin show, and, you know, whatever the format may be, digital edition on a blockchain, as an extension of their print market. So every artist usually has a market for their unique paintings, for prints and potentially other media sculptures, whatever else they work in. So if there is an edition of, say, Ordinals or NFTs, an edition of a thousand, you can probably most closely, and it’s a generative edition, meaning that every single one is different, it’s unique.

26:09 So you can most directly compare it to a print edition, in the, let’s call it Legacy Art Market, a print edition of also a thousand. And, you know, it’s not exactly one-to-one correspondence because the print edition is, every print is the same, except for the condition and other things, but more or less the same. Whereas in the digital on-chain world, usually it would be different because it would be generative edition, everyone is different, so it would be like a different format.

26:37 But more or less they would be comparable. So you would like the prices to more or less correspond from here to here, right? Basically for the same edition size and other parameters. So that’s one. So the pricing, it has to be properly priced.

26:51 But two, it has to be offered ideally to a new audience, a new audience that is incremental to the existing audience so that it doesn’t cannibalize the existing market, the existing audience, the existing economics of that artist. That audience is plentiful and eager in Web 3 to receive new interesting things, especially by brand-name artists whose works they already may have seen in museums, because in the case of Yom in June, it’s like all museums around the world, like this imagery, this iconic imagery that this artist has given to the world is quite universally recognizable. So those newcomers now have the ability to own a piece of it, which they would not be able to do in the legacy art market, right?

27:38 Because they don’t have access to it, but in the digital they do. So that’s two, incremental. So basically let’s enumerate it again. Number one, artists like to experiment with new media. It’s just a joy for every artist.

27:51 Number two, they want to make sure that the pricing in the digital medium and in the legacy art market are consistent. And number three, that the audience is incremental, incremental to the existing user base or existing collector base. So these are some of the ideas, some of the main ideas for how to properly bring an artist to market in Web 3. But then there are some technical questions. Which chain?

28:18 Because there are so many different chains, right? In what format? What should be the edition size, you know, and so on and so forth. So what we like to do, and like let’s just go back to the same case of human June. What we like to do is we like to develop the journey of an artist as the artist enters this new space.

28:37 So with human June, first we did an NFT edition. So it was kind of like PFPS. It was very accessible. It was very, it was sort of iconic because it used the iconic imagery of that artist. And that was his first entry.

28:53 Now at this point he got an audience, right? So the audience of tens of thousands of people, maybe hundreds of thousands that have been exposed to it and a thousand of them were the lucky owners of the artworks. Then we thought, all right, we did other projects, other artists, and then that community, human June’s new digital community came back and said, well, actually, we would like a print. We would like to have a print of NFT to put in the wall. That was completely unexpected, right?

29:24 We thought this was a digital community, completely, you know, in no way connected to anything physical. But here they were. And so about a quarter of them wanted to have print. So we went back to the artist and said, all right, how about we actually do a print edition? He said, fine.

29:42 As long as it is priced in line with my print market because I cannot damage my existing market, right? So we did that, and then about a quarter of the NFT bars bought the prints. So that was the second. Now we have, you know, an even more expanded footprint of this artist within this now crossover Web2, Web3 community. Then, you know, Ordinals came about and became super large, right?

30:07 Super big earlier this year. And so then it’s like we thought, well, that would be amazing to actually make this artist to be the first artist, first established artist in the Ordinals community. And so we did that. And that was, you know, really, I think, beautifully executed 1200 Ordinals, also iconic in the context in, you know, various like a very Web3 native context that, you know, also did very well. And now that’s a whole different community for the same artist.

30:39 Because, you know, Bitcoin maxis and Ordinals people are non-overlapping with, you know, the Ethereum people as a sort of different people. So now the community is expanding for that artist, right? Then the runes came along. We did the same thing. Now we are going to put this artist into a Metaverse.

30:55 And so there will be an avatar of that iconic face that will be running around the Metaverse, doing all the Metaverse-y things. And so that’ll be new community, the Metaverse community. And then we are going to, probably in about a month or so, tokenize and fractionalize one of his large paintings, those expensive ones. And so those, we call them shards, are going to provide ownership experience of a physical painting to an even larger digital community. So basically this is how we like to work with artists, right?

31:32 It’s like we develop this community step by step, part by part, in different chains, right? In different Metaversus, you know, physical and digital. And there’s one more thing that I forgot to mention, the last thing on this kind of quasi-case study, that the Genesis Ordinal of the Ordinal set that we have put together with this artist, then got auctioned off at Sotheby’s. So it came full circle, right? And came back into the auction houses that are already dealing in physical artworks by the same artists, you know, selling for millions of dollars each.

32:13 And now this Ordinal came back into the same, essentially, distribution channel. So I think it’s very, very kind of interesting for an artist to enter the space as long as they do it properly, they do it comprehensively, they do this multi-distribution channel, because, you know, very few people understand Web3 as a distribution channel, because it’s like every wallet type, every chain ecosystem, every little piece of the blockchain ecosystem is part of the distribution channel. So if you have an artist to present to the Web3 universe, we have to utilize all the available distribution channels by only like put them on Ethereum, and that’s it.

32:57 No, it’s just lots of other places, right? And lots of other communities. And most of those communities are not overlapping. And so basically, that’s our approach to taking artists to Web3. And that Genesis Ordinal, is the person that bought it just independently decided to ticket Sotheby’s and auction it off.

33:17 Yes. That’s nothing to do with you. And Sotheby’s kind of liked the idea so much that they put it on the cover, which is a big deal, of the catalog for digital art that they were selling at the time. So it was actually lot number one and did quite well, well above estimate. What did it sell for?

33:34 Well, it’s an Ordinal. So it was a small piece, right? And we have 1,200 of those. It sold for 6,000 USD. Wow.

33:42 And wow, I just didn’t know Christie’s would be right on that cutting edge in knowing… It was Sotheby’s. Sotheby’s, sorry. And knowing what they are and, you know, to be aware that that was such a phenomenon. No, they follow the trends.

33:56 So when Ordinals, you know, those trends, they go in waves. And when Ordinals has its first wave, I think many more waves to come, you know, the auction houses were on top of it. Wow. So in addition to everything else you do, and we’re still going to get to more at Live Art, you have intellectual property, a massive amount on how to onboard high-level artists into this ecosystem, not just a little. I mean, that’s a crazy case study with multiple generations.

34:24 And so now you’ve already done it with multiple artists. So now you know what has worked in the past or what could work. And you can now… Is this almost like a kind of an incubator for you or a separate area of the company that can take an artist and… I mean, I don’t know.

34:41 What do you call that? Is it an incubator? Great question. We call it Live Art Studio. Studio.

34:46 And that’s because we help… There are a lot of pieces that go into… Well, as you know, based on this case study is already evident, but it’s not just like what the distribution channels are, but also what will resonate the most with each one of these distribution channels. Like if you look at how we presented the artists to the Bitcoin Maxis and Ordinals community and how we presented the artists, the same artists to the Ethereum community, completely different, right?

35:13 Completely different visually. It was sort of elaborated in a very different way. And there is a reason for it. These are different communities. They have different expectations and you have to understand them.

35:21 So this Live Art Studio entity that we have within our company specializes in that. How to present an artist properly to every community within the Web3 space. And so if artists are interested in that, they contact you and then you review who you want to work with and who you have the time to work with. And you kind of take it on a case by case. Yes, it’s a very laborious process.

35:46 So we launch about once a month an artist like this, right? An artist of this caliber. I’d love to do it more often, but for now it’s sort of difficult for me to imagine how I would. It’s extremely, extremely laborious, working with artists. It’s not like, you know, the artist just says go do whatever you want.

36:04 No, you have to collaborate with artists. The artist has the last word and everything. I mean, these are world famous artists. So there’s a lot of iterations and it takes a while, but it’s worth it. Yeah, it’s amazing you’re doing that.

36:15 Let me ask you one question about the fractionalization and the tokenization of that art. That was your kind of final iteration, at least currently, I’m sure there’s gonna be more. But say you now go kind of full circle back to that real world piece of art. It’s a four or seven million dollar painting, for example, and now you fractionalize that and now the digital people own it. Do you foresee ever anything in the future where I might get something physical that would represent my fractional ownership of that, like a print or something that represents?

36:48 Because I’ve always heard the talk of fractionalized ownership of art and part of me Boris has to say that I don’t know if people would be satisfied knowing I own one one thousandth of that thing and I might want to feel it or see it or have some digital representation. Maybe that’s an NFT or maybe that’s a printed home that says I’m not one of a thousand but one one thousandth of that. I don’t know if you’ve thought about that or what you think the future might be.

37:16 One hundred percent agree with you. What we are doing with our tokenization product is creating the experience of ownership. It’s not the experience of speculating on the price of the underlying assets. That’s not interesting for many reasons. What people are interested in is the experience of ownership.

37:39 If you’re owning a little shard of a Warhol or a Basquiat or a Kusama, that experience needs to be elaborated. Really, our fractionalization product is about that. It’s about the experience of ownership. Some of the components of it is that, number one, how you acquire those shards and you acquire them in gamified ways. You do not just come into some boring site and you buy a piece.

38:06 No, there is a whole experience about you selecting or randomly getting assigned a piece of the painting. That piece of the painting, depending on where it is, it actually may have different values. Right now, we are going to do a famous Warhol painting, actually print. Famous Warhol print is Superman print. The face of the Superman or the fist of the Superman are more valuable, because more people want them, right?

38:38 Then some background that is just uniform color. So that not every shard is created equal and people compete in the primary sale for the right shard or they want to get shards that give them some kind of an outline of the head of the fist. If they don’t get it, then in the secondary market they can try to buy it from somebody who does have it and then assemble that piece that they want, right? So that’s part of it. But then the more they kind of aggregate of that painting, the more perks they get.

39:14 So at some point they can get digital and if it’s either represents some portion of it, at some point they can get a physical print or some kind of a physical memento or doesn’t even have to be on the wall. It could be a credit card, an anodized aluminum, kind of thing that is by the way indestructible, just like blockchain. You cannot burn it. You cannot do anything to it. It maintains its color and maintains its shape.

39:42 And so that’s something else that you can keep and it of course points through a QR code to the exact place on the blockchain that proves that you own it, right? So there are different ways to create these experiences of ownership. And the way that I describe the product that we sell to my team internally is that this is what we’re selling. We are selling the experience of ownership of this physical asset. We are not selling a financial product, definitely not.

40:09 We are selling an experience of ownership. Why do you say definitely not? Financial product? Yeah. Because I don’t think it’s enough.

40:18 I think that it’s a nice component of the utility, of the experience of ownership, right? It’s like going back to art, the legacy art market. Nobody, well, very few people buy art simply as a financial instrument. Some do. There are companies that kind of specialize in that.

40:36 Some do. But very, very few. The vast majority of people buy art for a whole bunch of reasons of which the financial motivation is a part, but it’s not the biggest part, right? So they want to, there is the experience of ownership. There is the bragging rights, right?

40:53 Because art, because like every piece of art is unique. If you have it, financials doesn’t have it and people love it, because people love owning something that nobody else can. So there are multiple motivations of which financial is one, but it’s not the main one. It feels to me that if you solve the ownership experience, then the financial thing is solved as well. Because if you make it to where someone really wants it and feels like they want it, then it’ll tick the box for also becoming a financial asset, because then there’s a real desire and demand.

42:21 For sure. I think that there are other ways also to turn into a financial asset, and we are going to do that in the future. So what that means is that once everybody has these shards, nothing prevents people or somebody like us of taking all of the shards of all of the war holes that we have ever fractionalized and putting them in a pool, which essentially is a fund, and now there is a war hole fund across all of the war holes that have been fractionalized by us, and then that fund tracks the performance of the war holes.

42:55 It’s a tracker of that artist. Or you could mix and match different artists into composite funds, like a contemporary art fund, or an American art, or British art. And then what happens through the magic of blockchain and all of the protocols that have already been created, you don’t have to do anything new, you can not just portrait those, but you can also short them. There could be derivatives, there could be speculation of all sorts of different interesting kinds.

43:24 All of that is coming, that’s in the future. But first, we need to bring this asset class to blockchain. The more, the better. There is a trillion dollars’ worth of it that needs to be ported over, that needs to be migrated over. So our goal is to get as much of it to blockchain as possible.

43:42 Some of it will come as an extension of careers of existing artists who are just entering the digital space in new, like a new medium. Some of it will come as fractionalization, tokenization of physical masterpieces that are already out there in the secondary market, or in the primary market, in the case of living artists. Some of it will come from emerging artists. So we do a free mint a day now. Every day there is a free mint by emerging artists.

44:10 And so that’s emerging artists are now kind of through the same platform, through the same system, entering blockchain as well. We also have educational products. We have one of the top 15 telegram games in the world right now. And that game is getting millions of people into the habit of looking at art, guessing the artist, and associating or guessing a price. So it’s like every day, it’s almost like a clicker game, similar to a clicker game bit.

44:45 So you reveal, the more you tap, the more the picture gets revealed. And the sooner you can guess who the artist is, the more points you get. So it’s sort of gamified like that. And what it’s trying to do, what I am trying to do with it, is to get people to get used to what art looks like, and get used to these artists, names of the artists, and get used to the prices that are associated with these paintings. Most people don’t know how much different pieces of art code.

45:19 So that when the time comes to tell them, oh, actually, in this Warhol, you can actually own a piece of it. Not just click on it and guess a price. You can own a piece of it that will not be a surprise to them. It will be like, oh, Warhol, I know. Oh, it looks like this, oh, I know.

45:33 Oh, it has this price. Makes sense, right? So this education of millions of people through gamified products is critical to our success as well, because it’s sort of, in business terms, it’s the top of the funnel that is now educating the Web2 community, Web3 community, on what this commercially viable art is. So many questions I have, and that’s super exciting. I want to ask you about gamification, but first I want to talk about that funnel, because this is, again, what makes you extremely unique.

46:09 We spent the first part of this conversation talking about one of the top 50 artists in the world who has works for $4 million, $7 million, $150 million, and you could have maybe stayed in that high end. Again, you have a background with that, and that might be such an obvious call for someone to do this in blockchain, but you have decided to try to attract everyone to this website, which means engaging with people that might not have $7 million, that might not understand that art, that might not have never seen a painting in a museum before. Can you talk about that decision and then the ability to do that, because that’s a very challenging ask, you know, for any team or any company.

46:55 Yeah. It may seem so, but if you look at the numbers, it just becomes logical, because if you look at the legacy art market and if you look at the buyers in the legacy art market in, you know, $1 million and up, or like $100,000 and up, there are tens of thousands of such people, maybe some low six figures in the world globally. If you look at people in Web 3 who are currently interacting with art-related content, there are millions, and it’s much easier to take, you know, people who are already interacting with such content, who are already digitally native, who are already, you know, enjoying memes and maybe have invested in meme coins and in this meme community.

47:48 So just as an example, a person like this, it’s a much smaller leap to buy a shard or a Warhol than it is for a legacy collector to do anything digital at all. Okay. Okay. So in fact, the numbers are there. They are like Web 3, it’s like, it’s a, the art world doesn’t understand it yet, but it’s a blessing for the art world.

48:16 It’s like, it’s this expansion of the market that the art world has been looking for a long time, except that they were not thinking about it in the right way. They were thinking about, let’s educate, you know, young collectors. Let’s educate young people about, you know, let’s invite them to museums, let’s invite them to those fancy cocktail parties. And then as soon as those kinds of people get interested in art and they start attending those fancy cocktail parties, they become just like the old collectors.

48:41 They become elitist, they become, you know, you know, the legacy art world has been extremely, has been awful at maintaining, at community building. That’s what it is fundamentally, awful at community building. It has cultivated this elitist scene that, you know, certain people enjoy and that prevented it from growing because the community, that’s not how you maintain the community. So Web3 is all about the community, as we all know. And so educating that community about the art things, asset class, education, whatever, you know, financial, non-financial aspects of it, is where the new universe of people entering the art world is coming from.

49:29 There’s no doubt about it, just like the numbers allowed in the world. So this decision that you are asking me about was simply a logical and business decision. There’s just no other way to grow. There’s no way to grow in the legacy art world. Legacy art world is stale.

49:46 Okay. Wow. Tell me about gamification. Because when I think about art, the last thing I would think about is games. Or when I think about legacy art, I don’t see a bunch of people playing games.

49:57 And yet you’re all about the gamification inside live art. So tell me about that. Not just inside, but also outside. And it’s a very, very important part of our strategy. So the gamification is all about getting people to do what you think is good for them without them necessarily realizing it, without them just having fun.

50:20 So they’re just having fun. They’re playing games. All games have in-game purchases. Except that right now, what do people purchase within the games? They purchase, I don’t know, the various game assets, the shields, the clothes, the fashion items, whatever they play, whatever they get.

50:40 They could also get shards of art that have some utility within the game. So that’s basically the idea. It’s not the only distribution channel, but it’s a very interesting distribution channel because there are lots of people who are playing games and those people are buying things within the game and those things have, sometimes I would say questionable value, but they’re still buying them. So why not buy things within the games that have provable value, that have actual value to you and that value is sustainable, right?

51:08 So that’s the overall idea. And so we have some of the games that we have been publishing ourselves. I talked about those before. So things like where people sort of get used to this asset class and get used to the artists, the prices and the images. But what we are doing now is we are taking these shards, these pieces of Warhols and Baskiads and we are incorporating them into other people’s games.

52:37 So that ideally, whenever you play any game out there and any gaming ecosystem, one of the things that you can purchase within the game is a piece of Warhol, why not? And then you become an owner of that Warhol and you can do something with that more solo Warhol or shard, potentially even within that same game as well as outside the game. Okay. So only possible within Web3. So it’s very kind of all that Web3 gaming that makes everything composable is really the underlying enabling technology for such a distribution channel for shards of art.

53:13 Or, by the way, theoretically, shards of any other real world asset. It doesn’t have to be art. So we just happen to be specialists in art and this is what we do for now. And it’s a huge asset class that’s $2 trillion worth of value to bring to Web3. But theoretically, you could buy other tangible items in games.

53:33 It doesn’t have to be art. So that’s something else we’re thinking about. Right. And I want to cover that for sure. But you’re also doing the Telegram game yourself.

53:41 You said emerging artists are coming out all the time. You have a content funnel kind of in the beginning as well. So you have all these different ways of engaging with a varied audience. Some that have a lot to spend, some that have very little to spend, some that are just learning or consuming content. That’s exactly right.

54:00 The vision is to have anybody who is interested in art, either as an art curious person, or as in a hardcore art collector, or as a trader, or as an investor. And at any price point, from free, as cloud games are free, all the way to quite pricey, for that NFTs and ordinals by famous artists, and from anywhere in the Web3 landscape, from any chain, has a home somewhere within our ecosystem. So no matter what the price range, what the level of interest in art, and what chain you’re coming from.

54:34 So there’s something for you. Either it would be the games, or it would be some of the things that we publish within Live Art Labs, which is our own projects, or it would be the shards of famous paintings by masterpieces, by famous artists, or it could be NFTs and ordinals by famous artists who are extending their practice into Web3. Whatever the case may be, there is something there for you. And if you don’t know the blockchain, you’re just coming from the Web2 world, you can engage as well.

55:05 You can come on there and learn, and not know your yet looking at blockchain stuff. Yeah. So this is the way they come to the next billion people coming in. So I think that’s why I think this is this Trojan horse. Art is the Trojan horse that can bring the next billion people into Web3.

55:22 It’s precisely why. Because those not yet enlightened people all have the same, you know, they also have interest in art, right? And a way to capture it is through this ecosystem that we have built. So absolutely. I think that this is the tip of the spear in bringing this next billion people into Web3 is art.

55:47 And so on Telegram, for example, they’re playing these games, they’re learning, they’re tapping, there’s rewards. A lot of those people probably really aren’t on Web3 yet. They’re using the messenger, and all of a sudden they can play and see it. Do they get like live art points or things like that? Is there a way to kind of bring them on?

56:03 They do. They have the points. And by the way, they’re not just playing games. They’re doing on-chain interactions. The majority of the people who play in the games have on-chain interactions on tone or potential and other chains that are connected to the Telegram game.

56:16 Currently it’s just tone for us. So those people, you know, obviously in order to do on-chain interactions, you have to have a wallet. So all of those folks who are just Telegram users now, through the magic of Telegram and tone and how they’ve constructed the ecosystem, which is very impressive, they now have a wallet and they’re doing on-chain transactions. And so now all of these opportunities in Web3 are open to them, potentially to what is it, 900 million users?

56:48 Yeah. And I’m sure there will be others. It’s like there are many on-ramps within the Web3 ecosystem that are opening up to onboard this next billion en masse. But the question is, we always talk about it. Let’s onboard the next billion here.

57:04 There is like 900 million people on Telegram and let’s just bring them all in. Okay, but what are they going to do? That’s the question, right? Yes, we have the technology to do. That’s nice.

57:15 Yes, we know how to give them wallets. That’s cool. Yes, we know how to connect those wallets to their Telegram account. Fantastic. But what are they going to do?

57:23 We need to give them things to do, things to own, use cases that are compelling to them. And that’s basically what I think is the next big chunk of work ahead of us. And that’s why we are so focused on creating these high-quality things that people can own, trade, enjoy, interact with, engage with. Because the Web3 and the whole crypto community right now doesn’t just need new users. It needs something for those users to do.

57:56 And that’s basically, to me, strategically, in terms of growth of the crypto community and maybe even its very survival is the most important thing. I agree with you. I agree with you. So we need you to be successful to save the rest of the industry effectively. What’s coming up in the next quarter or two for live art in order to engage these people?

58:20 What do you have planned, at least for the next 6 months, 12 months? Well, we are looking to grow our fractionalization business as much as possible. We’re going to launch, before the end of the year, get to the point when we launch a new masterpiece per week, so piece per week, to our community. The idea there is to get to the point when people don’t just kind of buy one chart here and there, but they have an entire collection. And that’s going back to your idea of giving, you know, different ways of giving people the collecting experience.

58:55 It’s not just the collecting experience of a thing, but it’s now a collecting experience of building a collection. In fact, you will be able to own, partially own, a collection that rivals a collection of most major museums. So here you are. It’s like you can have your Warhols and Baskettes and Kusamas and many other eminent painters in your collection. Okay, you only own a small piece of it, but you own something and you have a collecting experience through all of the mechanisms that we discussed earlier to really enjoy not just an individual piece, but an entire collection that you have built, right?

59:33 So that’s one thing that’s coming. I think that’s super important. The second is there will be many more activities at the top of the funnel. So many more games. We look to take our Telegram game to the moon.

59:46 They think that it has the potential to do that. So I think that’s going to happen very soon. So that’s the second thing. And then the third thing, we have a fairly large project pipeline with famous artists. We would like to continue bringing those…

1:00:02 You know, this is… I think of our business as in different dimensions. One of those dimensions is a time cadence. The time cadence for games is real time, all the time. Every day, every week, every second, somebody’s playing our games.

1:00:18 You go to Etherscan or whatever, you’ll see transactions piling on constantly, people interacting with our ecosystem. Now, I think of fractionalization and tokenization of masterpieces. That’s a weekly cadence. So every week, there is a new thing that’s dropping and people are buying it. And I think of us introducing famous artists into Web3 as a monthly cadence.

1:00:44 So every month, there is a big project that’s coming in. So basically, maintaining those cadences across the entire business, across all the levels of the business is strategically kind of what we are doing. But we still have to fill in some product kind of gaps here and there within this big vision. In particular, you know, the fractionalization, tokenization will be a big push in the next few months. Okay.

1:01:09 How important is it to have a token? And then what are the challenges around that token? And then how does that become a necessary part of that ecosystem going forward? Well, the token is critical to the ecosystem. It’s really the glue that binds everything together.

1:01:28 So they’re currently using points, eventually it’s going to be tokens. But the way that the ecosystem works and the way that the incentives flow within the ecosystem is powered by the token. So it’s of critical importance. I cannot say when the token will be launched, but it will happen at some point during the evolution of our company in the not-too-distant future. And that will be a major milestone as well.

1:01:56 And so, again, it’s going to be all about the community and the loyalty and who has the most interaction and that the token will help there or the points will help there and that will give you access to this. It’ll be kind of the gas and the fuel inside this entire product ecosystem. Yeah, that’s part of it. But you will also be able to use points to acquire different assets within our ecosystem, be that those shards or some of the other assets that we publish.

1:02:24 So there are lots of ways to not just earn points and in the future tokens, but also to use them within the ecosystem as well as outside of the ecosystem broadly speaking. Okay. Talk to me about geography. Right now, I mean, I just got back from Singapore. I think you were in Singapore as well.

1:02:42 We’re reminded yet again, I was reminded last year as well, that in many ways Asia drives Web3 right now while America tries to get their head figured out as far as what they’re doing. How much of your business is in Asia and then in the future, will that move around the globe as we see regulation adoption happening? How do you see that playing out? Yes. Most of our business is in Asia, I would say about 70%.

1:03:09 I think about 80% of blockchain activities in Asia. I believe that’s a fact. It’s very difficult to track because some parts of Asia use VPN to block their origins, so it looks like they’re from other places. But I think that most of the available evidence shows that 75% to 80% of all blockchain activities originates in Asia. I didn’t know it was that high.

1:03:30 Right. So for us, it’s the home turf. This is where we’re the strongest. That’s why about half of the artists that we work with are Asian artists, right? So it’s not an accident.

1:03:41 Most of, well, a lot of our current user base is there as well. I think that will continue to be the case, but I think that Europe and the US, if it changes its regulatory stance, is a huge market, right? Right now we’re not touching the US market at all for the regulatory reasons, but even when the regulation landscape changes, we’d love to do it. Now, also when we think Asia, there’s a lot of countries in Asia, and they’re all different, especially, well, probably in all respects, but with respect to their art, their relationship with art, very, very different, right?

1:04:19 So there is an amazing collector culture in, say, Korea and in Japan, right? And then there is a lot of trading of art and related things that is happening in China and Hong Kong, and there are a lot of Web3 people who are doing all sorts of things in, say, Vietnam and in Thailand. So there are different use cases that apply to different countries. We try to, you know, every time that we launch something, we launch it in eight different languages, of which only one is Western English, right?

1:05:01 So every country is different with respect to how it perceives art and what it wants to do with it. And so there are many more, say, for instance, holders, right? The primary markets, say, for instance, if we launch an NFT or an ordinal, holders of those NFTs, so they buy hold in Korea and Japan than in most of the rest of Asia, where trading and speculation is much more prevalent. Statistically speaking, obviously, there is everything and everywhere, but, you know, the trends.

1:05:33 Yeah, that’s wild. I get the education both my times in Singapore and people will pull me aside and they’ll be like, okay, you got to go to Vietnam. You got to go to Thailand. And then it’s like, oh, then you’ve got Indonesia down here, like a different, maybe socioeconomic, but like hundreds of millions of people. And then you have the Philippines over here that, you know, the play to earn craze was there.

1:05:55 And I was just getting schooled to where my brain was like, really trying to figure out what was going on. I’ve spent time in Japan. I spent time in some of these countries. Yeah. They’re all very different.

1:06:06 Very different. And that’s why it’s important to have a product portfolio that can target different communities. Right. So more trading community at the lower price point, Vietnam, Indonesia. More holding community at the higher price point, Korea and Japan, just roughly speaking.

1:06:21 Right. So, but since we have all these different products in our portfolio at all these different price points, we’re able to create different product mixes for different geographies. Hmm. Talk to me about your backers because you’ve got big names like Binance Labs and OKX and Animoca Brands and Hashkey and Samsung Ventures. I mean, it’s pretty strong.

1:06:44 How did you get all these people on board? We have a very strong cap table. I think how we got them on board is with the vision. There is really not much else, perhaps nothing else like this in the kind of crypto universe. So our pitch really stands out.

1:07:02 And which could be a good thing or a bad thing, depending if you believe or not. And well, to their credit, all of these illustrious Web 3 behemoths really liked what they heard and they really have been extremely supportive since they invested. Talk to me about competition because we’ve been investing for almost three years and I told you this before when you came on some of our calls and I always tell people, we saw people coming in with a vision to take this market on chain because it’s two trillion dollars.

1:07:38 Like you said, it doesn’t take a rocket scientist for someone to see this has huge potential. And there were people that came in with backgrounds not similar to yours in Sotheby’s and Christie’s experience and this and that. But I didn’t hear from them again and I never saw anybody coming to where they were really going to master what was going on here. So have other people tried? Have you seen competitors out there?

1:08:04 Have they been unable to actually do this? What do you see out there? Most people who have tried have gotten stuck in Web2. So this is why I should say there are some people who have tried who got stuck in Web2 and some in Web3. Nobody has successfully crossed the two, right?

1:08:25 So basically, if you think about it abstractly, we have content, high quality content that is coming from the Web2 side or basically from the non-digital world primarily. And we have a distribution that’s coming almost entirely on the digital Web3 side. Breaching those two things together is extremely difficult because you have to understand both in detail. If you don’t understand Web2, you know, you’re not going to be able to source the best cats and the, you know, and the war holes at the right prices.

1:09:06 And you certainly will not have the trust of world famous artists who have an idea of going to Web3 in some way, right? So you have to have that. But if you don’t have, like, a thorough understanding of Web3 and its distribution channels, then you will not be able to sell of those wonderful products that you source, right? So connecting these two worlds and being able to be, being fluent in both of them is unique to us. It’s just that nobody has been able to do it.

1:09:37 It’s not to say that nobody will. Somebody will figure it out. We will welcome competition. But for now, we’re in a pretty good spot competitively. There’s no one out there that really comes close to what you have with the wallet sizes and the relationships and the revenues and everything.

1:09:51 Just not right now. Not in our sector, right? That’s a beautiful thing. And when it comes to your team, how do you build a team that can do that? I’m just kind of curious.

1:10:06 What does it look like? What are the challenges? Because you guys do a lot. Tell me about that. Well, my team, first of all, is awesome.

1:10:17 Clearly. You have to do awesome things. You have to have an awesome team. A big chunk of my team, about half, has come with me from prior ventures. This is my fifth company.

1:10:33 So we have actually built other things together. So it’s a long-term relationship with many of the teammates. And I think it’s a wonderful thing, both because I know what they’re capable of and I’m really grateful that they keep following me from one place to the next. But also because we try to create a fulfilling, working, very high-octane environment. So what does that mean?

1:11:09 Is it intense? Well, it’s extremely intense. You see, when you attack a new space, which changes every day, you have to be able to switch gears constantly. And yet at the same time, if you tell an engineer, for instance, build one thing and then drop it and build another thing, the engineer gets extremely frustrated. This is the worst thing for an engineering mind to do because they think so deeply about the problem.

1:11:40 And then you tell them, oh, don’t work on that anymore, work on something else. This is the worst that can happen to them, right? So managing the tension of sort of having a productive product organization. And by product, I don’t mean just engineering, right? When we take an artist and then make that artist package that artist for the Web3 community, that’s a product exercise, right?

1:12:09 It’s not just writing code. So having a productive product discipline in a very fast-facing, fast-changing, most importantly, environment that Web3 just naturally is, it’s like there is a new opportunity, there is a new chain getting launched, and that chain has a lot of marketing spent. Let’s partner with that chain because that chain is going to help us to access a whole bunch of new users which we wouldn’t access anymore. Let’s do it today because the hackathon is starting tomorrow, right?

1:12:42 This is the kind of thing that happens all the time. And having the balance, right, between product discipline and this fast-changing environment that we are naturally finding ourselves in because this is not a mature market, it’s a very fast-paced market, requires a very special bunch of people. And so if there is anything that I look for when we grow the team, is that? Can you have this kind of agility and mental agility to be comfortable in such an environment and situation that is not comfortable for most people?

1:13:21 In addition to the excellence in whatever the functional area that you’re covering, but this is this agility. It’s not just a word, right? Everybody says agility, agility, I want agility. No, this is what it means. What it means is that you have to be able to maintain product discipline and release discipline and have revenue discipline while everything around you is changing.

1:13:42 It’s like building the proverbial airplane in the sky. Right. And Web 3.0 changes faster and more swiftly than any industry in the world. This is my fifth company, far faster-paced than anything else I’ve ever done. By a factor of five, I would guess, right?

1:13:57 Yes. Just when something’s hot, then it’s not. Just when a chain is on, then the next one comes along. Yeah. Is it a big team?

1:14:04 Is it distributed? It’s distributed. It’s not big. It’s about 30 people, 30, 35 people. It’s distributed.

1:14:10 It’s distributed. We have to cover our customers in Asia, our artists all over the world, but primarily actually all over the world. There is a big part of the team that’s in the US, in North America, in Europe, and in Asia. Will this be the biggest company you’ve ever created? Will this be the biggest thing you’ve ever done in your life?

1:14:35 Undoubtedly. Is that what you set out to do? Yes. I always do. And then, let me clarify that, the biggest business thing.

1:14:50 For sure. Right. I also have kids. Right. Okay, besides the kids, of course.

1:14:55 And when you sold your last company, I guess you always want to build something bigger and better. But, I mean, where you are now, two years ago, did you ever imagine that you would be where you are now, like on the precipice of something so massive that live art is sitting on? Yeah. I kind of saw, you know, usually it’s less clear, but I feel like with crypto and Web3, it’s just clear. Maybe because I’ve seen other cycles before, right?

1:15:26 With Web2 and even with Web1, I kind of caught a little piece of that. So, I sort of see how it goes and how these waves go and how the cycle feels when you’re in it. And so, I feel like I was able to kind of recognize where we are in the cycle, and I still sort of seen as we go through all these ups and downs. To me, you know, I can relate it to the Web2 cycle and even Web1 cycle that I have witnessed. So, I think the timing is amazing.

1:15:58 I think this thing will, you know, it’s a rocket ship. It’s like we’re in the very, very beginning of it. We are in this initial stage of it when we have built the infrastructure, as I mentioned earlier, and we are waiting for this next wave that will fill this infrastructure with wonderful content and use cases, which will come. And that’s when, you know, the big hockey stick is going to happen. You mentioned kids.

1:16:26 I have a seven and eight-year-old, and my seven-year-old owns more digital assets than anybody I know. All right? I mean, this kid’s all over roadblocks. He’s got the game. He’s got the this.

1:16:37 He’s got the this. He’s got the that. And fast-forward 10 years, I mean, he’s the perfect person to be on live art. I’m curious what you think will evolve over the next 10 years as this younger generation comes into the buying power, learns about art, and then right into the blockchain, how that changes that whole ecosystem. Like you said, the old world was trying to basically get these people to go to the cocktail parties so they could become one of those legacy people.

1:17:08 Now we’ve got people that are so comfortable with digital assets. How does that change that whole ecosystem in the next 10 years? Yeah. In an unpredictable way, but in a profound way. I think this generation is unlike any other, right?

1:17:21 This is the first generation that has grown up with iPads, right, with devices. They do not know the world without those devices. It’s not like we can remember that world, but we’re sort of used to it now. But no, they just don’t know the world. So they’re in it.

1:17:39 They’re in those oculus or whatever, this new Apple thing, Apple Vision Pro headsets. They’re in the Metaverse. They’re on Web 3. They’re there. And what it’s going to do to their heads, nobody knows, you know, for a parent that’s always, you know, some parents go in extreme and say no screen time.

1:18:02 This is all bad for you. Some parents say, you know, the biggest blessing for your education is YouTube, which by the way I 70% agree with, you know. So how it’s going to work out like nobody knows, but it’s going to be just a profoundly, profoundly different world. There is just no doubt about it. And if you start mixing AI into it, well, nobody knows where it’s going to go.

1:18:28 So because speculate, the only thing that is certain, it is going to be nothing, nothing like the world that we’re experiencing now or in the past obviously. It’s also certain that that whole phenomenon is super bullish for what you’re doing. Super bullish for what you’re doing. I think that that world will be digital. That is a given.

1:18:47 Yeah. Yeah. What exactly is going to be happening in that digital world? Hard to know. I’m betting that the culture of ownership, you know, we live in a capitalist society.

1:18:58 So the culture of ownership that we have in our society as it is, is going to transition, migrate into the digital world. And so people are going to start en masse wanting to own things in the digital world, just like currently they want to own things in the physical world. So to me, that seems like a low risk bet. And so any business model that plays into that trend is probably has pretty good prospects. Yeah.

1:19:37 What’s a guy with a physics background and not only a bachelor’s degree but a master’s degree in computer science and electrical engineering from MIT doing in the art world? That’s a great question. Well, just so people know, Boris graduated two years after I did from MIT and if you majored in computer science and electrical engineering, it is the hardest major at MIT. I got a mechanical engineering degree and look, thermodynamics was hard but it is the hardest thing you can do there and you got not one but two degrees.

1:20:12 And then now you’ve gone on to this. There’s no art department at MIT. I don’t think there might be a few people in some major but it just doesn’t exist there. So it’s quite a change from what you studied. How did that happen?

1:20:28 Well, I still am a physicist by mindset and that’s what I was probably when I was born and I still am. It’s just who I am. And what that means is that there is this culture, there is this mindset of discovery and first principles thinking that is just my way of life. I don’t try hard to do it. It’s just how my mind works, right?

1:20:56 And so when I see a problem, whatever the problem may be in the early in my life, I did a lot of physics stuff like experimental physics at Bell Labs, which was one of the big temples of physics back in the day at MIT. Be that a physics problem or a business problem, I sort of approach it the same way. So what are the main drivers? How do we envision, kind of try to optimize for what we think the future is going to be given the available resources that we have?

1:21:32 And I really enjoy it. So that’s really what it is. I really enjoy what I do and that is fundamentally building things and solving problems. And so whether that is in physics or in business, frankly, it doesn’t matter. I enjoy business more than physics.

1:21:48 Just, you know, I’ve had more experience in it, more success in it, and I sort of emotionally like it better. But I’ve had, even in science, moments of discovery that are still with me and that inform how I think about problems. You were involved in some breakthroughs in physics. Can you talk a little bit about that and how that changed your mind? Maybe you just mentioned it there.

1:22:18 Sure. Yeah, well, that was a long time ago. So that was while I was still at MIT and I was at Bell Labs. So Bell Labs was, you know, as I mentioned, one of the premier scientific institutions, lots of Nobel Prize winners. It was actually an amazing place.

1:22:32 You could walk down the corridor, and I did. And you can see, you know, people who, like the guy who wrote C++ was there, the guy who invented Unix was there. You know, the guy who discovered microwave background radiation was, in fact, the president of Bell Labs at the time when I was there. It was just amazing stuff. Lots of Nobel Prize winners just wandering down the hall along with you.

1:22:57 So it was fun. And at the time, you know, my particular area of physics was material science. And material science, there are lots of interesting things, especially now. Material science is really booming. But one of the most interesting phenomena in solar state physics and material science is what’s called superconductivity when, like, the resistivity of a material goes to zero.

1:23:21 Someday we will all be, you know, riding and levitating magnetic trains that will use that. And before that, we had to get the superconductivity. We have to get that superconductivity to room temperature because otherwise, you know, you don’t want to put lots of liquid helium on the rails. That’s not economically feasible and probably not very pleasant to ride on. So bringing this temperature, this superconductivity to the highest possible temperature is like the Holy Grail of physics.

1:23:50 Everybody’s trying to do that. Still the case of solid state physics. And so that’s basically one of the things that I participated in and witnessed. And it was late at night. It was a very interesting material that we were investigating.

1:24:03 It was called Buckminster fulleren. It’s a carbon molecule in the shape of a soccer ball. Precisely like a soccer ball. Pentagons, hexagons. Is that his geodesic dome?

1:24:14 That’s why it’s called that, right? So when the people who discovered that molecule realized that it was kind of like, well, it had different sizes. The smallest one is like a soccer ball, but there are larger balls, and then there are these nanotubes that have… And so basically, yes. That’s why they called it that.

1:24:33 And so we were doing different things with it. We were making different materials. We were putting impurities into it and then seeing what happens. One of the tests was to see what the resistivity of it is going to be as you reduce the temperature. And so we poured a bunch of liquid helium in it, and then we were monitoring the resistivity.

1:24:53 It was late at night. I remember I was eating a sandwich. I was sort of staring at this screen, and then suddenly it was ticking, ticking, ticking, ticking, and then went blum to zero. You know that you discovered something. But what’s interesting is that what’s most profound is that at that moment, you know that you’re the only one who knows it.

1:25:17 You know that it’s significant. You know that tomorrow or whenever the paper is published, it will be the talk of the town. And in fact, that turned out to be the number one quoted paper in all of science, not just in physics, in all of science that year, 1991. So it was like a big deal. But you know that tick, tick, tick, tick, tick, boom.

1:25:41 When you see it, you’re the only one who knows. So it was just me and my, you know, very eminent physicist who was my supervisor at the time. And we were just looking at each other and like savoring the moment. Like, wow, this is amazing. Now we have to figure out why and how and repeat the experiment many times.

1:26:00 There are a lot of steps, and you know he has to write the paper and submit it and so on. Get famous, which he did. But at that moment, you’re the only one who knows. So there is this universe of knowledge that existed up until that moment. It was this.

1:26:17 And that moment, it expanded by a little bit. And your name is attached to it, right? So this is amazing. It’s an amazing experience. This moment of discovery that happens very rarely, but it leaves, you know, a big mark in your head.

1:26:35 Did you like when it does? Did you eat the sandwiches? Did you just like stop, drop the sandwich, because that must have been like a step function. And you’re like, you know you’re on to something. That or a plug got unplugged or something.

1:26:48 You know you’re on to something. Well, that’s right. So the first thing is like, did I screw up? Check my instruments. Right. No, that’s amazing, right?

1:26:58 It’s amazing. This is the kind of thing that stays with me forever. And while, you know, I haven’t continued my scientific career sort of for the rest of my life, that experience is one of the formative experiences of my life. And so this moment of discovery is what I look for in everything I do. Wow.

1:27:16 Tell me about St. Petersburg. Tell me about the Hermitage Museum. Tell me about this beautiful city. I guess they call it the Venice of the North.

1:27:25 I’ve never been before. And tell me about the beautiful things in that city and maybe how that also led to this adventure in art. Oh, that’s, now that’s during some memories. So that was a while ago. But I grew up kind of a stone’s throw away from the Hermitage, very, very close.

1:27:43 And so sure enough, when I turned, I don’t know, eight, my parents sent me there for Sunday school. So it’s like every Sunday you have to go to the Hermitage and you have to look at all these paintings. They were tests. Well, I remember they were tests. They would show us art.

1:27:59 Actually, interesting idea. They were showing us these images and we had to name the artist. Just like Telegram. Just like Telegram. I know.

1:28:08 So that was great. And at first, of course, I hated it. My eight-year-old wants to spend the Sundays at a museum every single Sunday. But I kind of got used to it and it became interesting. You know, my relationship with art is different than, well, probably everybody’s relationship with art is different.

1:28:29 But I do not have like an emotional connection to art that many people do. To me, what’s super interesting is how and why did the artist do it. I’m really, really curious to know, why did you do it? Why did you do it? What was he thinking?

1:28:47 Or she? What was the motivation? You know, and for some artists, the motivation is commercial, you know, and even if nobody will tell you that, but it’s like you can just see it in their career that it’s like they start, they hit up and they do different things early in their career, then they hit upon a certain pattern that seems to resonate with people and people buy a lot of it and they just keep doing that pattern for the rest of their life, right? So that’s pretty commercial.

1:29:14 But then other artists do something different. So really understanding that, really the structure of this creative pursuit that humans have and frankly also its commercial side interested me from the start. And you know, again, this is very unusual, I think, way of connecting with art. Many people connect with art in a visceral sense and I actually don’t have it. I connect with it very strongly, but in a different way.

1:29:46 In a way that like, why and how this came about, you know? So, did this play a role in, I guess, for this reason, like an interest in art stayed with me for a long time. As you said at MIT, there wasn’t much art. Though, by the way, they do have a significant art program. They even have a museum. There is such a thing at MIT.

1:30:08 Really? Yeah. But it passed me by while I was there. I was busy with my circuits and the Buckminster Fullerings. But somehow it came back.

1:30:19 And that, it sounds like your unique relationship with art is also what live art is as well. I think so. I mean, that fascination with the commercials and some of that is probably one of the reasons live art is the way it is. I never thought about it this way. But now that you kind of brought me back to that early history, it sounds like there is some correlation.

1:30:41 Yeah. Yeah. It sounds like that unique relationship you have is one of the ways, the few ways that live art would be created. And if you were an emotional relationship with it, then maybe you wouldn’t have built this specific thing on the blockchain with all of its features. So, yeah, that’s fascinating.

1:30:58 Take me forward five years from now. What does live art look like? And also, maybe we can touch on this concept of real world assets because you alluded earlier that maybe this is just the beginning and in the future that could involve a lot of other real world assets. Now, this is a term that gets thrown around way too much in Web 3. But then also, what does that mean to you practically?

1:31:21 What is a real world asset in the future? Well, I think that it’s unlikely that people will live in a purely digital world. It’s possible, and some people think that we already are. It’s only simulation. Yes.

1:31:40 And I think that hypothesis actually has legs, personally. It’s hard to disprove. But let’s just kind of back to our real world. It’s unlikely that people will just go completely digital. It’s possible, right?

1:31:54 It’s like we are. There is technology for it. And people could, in fact, spend their lives there. But I think it’s unlikely. I think people will have a connection.

1:32:01 So, their nexus is going to be in the digital space and all the trends are pointing in that direction. But they have to maintain some connection to the physical world. And I think that’s fundamentally what this RWA with respect to the digital world and Web3 in particular is. It’s the ability to bring a piece of some physical experience into the digital world where the majority of your life is going to be centered on in the future. Or maybe not the majority, but an increasingly large portion of your life will be centered on in the future.

1:32:39 So, fundamentally, that’s what it is. And I think that art is an interesting first step in that direction because people have that connection to art in this world and in that world. And it’s a natural bridge. But I think in the future, other kinds of assets will make that transition as well. And you see already some of that happening.

1:32:58 Fashion, sort of going that way. And by the way, very interesting synergies with games there as well because within games, you need fashion for your avatar. And so, there are lots of brands that are making that transition and crossing over and then selling clothes for your avatar under their own brand. It’s just like all that stuff is happening already, so it’s not even new. And then other asset classes may follow.

1:33:21 So, various luxury goods and other things as well. So, I think that in the future, our digital sort of self is going to not just use digital assets inside the digital world, but also some pieces or shards, is the term that we coined, of physical assets as well. So, this is the trend. I think art is on the forefront of this trend. And I think it’s sort of a natural first mover along that trend for the reasons that I mentioned earlier.

1:34:00 And that’s why we’re focused on it first. But in the future, like five years from now, that makes 10 to other asset classes as well. I’m sure it will, in fact. Like fashion for sure, and maybe other things too. And do you think you’ll go into those as well?

1:34:13 Well, quite possibly. I think that whether live art will go, after all it’s live art, may not. But I think that there are opportunities in that general direction for sure. You could spin something off and go into property or securities or any number of real world assets that could be on blockchain. Yeah, real world assets, let’s just make, maybe it’s a pedantic sort of distinction, but lots of things are thrown into real world assets.

1:34:45 So, I would take the financial real world asset into its own subcategory. It’s probably going to be the largest in the near term. But I think that eventually, the non-financial real world assets are at real estate, fashion and so on, is really, I think, what the interesting thing is. I do not understand personally, maybe that’s just a limit of my understanding of why the financial RWA is so hot, because I think there are plenty of ways to buy it already outside of blockchain, but that may be just my own limitation.

1:35:16 But the real world assets of things that you can touch, bringing them into the digital world, that is transformational. Property is the big one. I think so, right? Yeah, but no one, I don’t think anyone’s managed to crack it. Ah, for the same reason. It’s like taking it too head-on.

1:35:37 You have to think creatively about how would property be owned by this new community and maybe gamification as a part of it. Everybody is thinking about it too linearly. I think there are other ways to think about it. Sounds like they need you, their next property. A couple questions.

1:36:03 Fashion was going through my head when you were talking about what you were doing with these artists. I know a little bit about fashion, but I also hear girls talk about the bags and the high-end fashion and how that seems to be very close to art. And we also see the fashion brands embrace Web3. And I’m curious if that’s something you’ll be embracing sooner than later, or do you want to stay in your lane for a little while? I think that when we bring artists to Web3, fashion is one of the other distribution channels to do so.

1:36:38 Many artists already do collaborations with fashion. Basquiat, Maracami, Louis Vuitton. So it’s like there are a lot of collaborations with fashion. And I think that making that more streamlined and especially in Web3 and especially gamified is a very interesting opportunity. So I think that it’s not so much that we will go, at least in the near future, directly into fashion, but in the way that we promote our art assets, artists and art assets, in conjunction with fashion and fashion brands.

1:37:14 That will for sure happen. Okay. Another question that came to my mind was, do you foresee a meme coin being created by you for your artists? I see you smiling already, but you mentioned that artist before, a Chinese artist, and all the different iterations. And I just thought, wow, a meme coin could be next.

1:37:33 Because it’s kind of the infinite use case of sharding, perhaps. I’m curious if you’ve thought about that or not. I thought about that. And the question is because it’s like… A lot of downside too.

1:37:46 Well, yes. But the artist, like when we… What I described as financialization of the artist, taking the shards, putting them in the fund, tokenizing the fund, and then essentially trading a tracker for the artist. That essentially is a coin for the artist. You can call it the Warhol coin.

1:38:05 It’s just a tracker of the Warhol market. There is a market data that we already have that will inform the trading decisions of the traders. They’d like to follow it. It will tell them, you know, Warhol is pretty liquid. And even in the traditional and the legacy art market, there are dozens of Warhol selling somewhere every day.

1:38:22 Day. Every day. And all of those sales, they affect the price. So you can see how the index of the Warhol will be affected by the real world events. But at the same time, it will be reflected in the real world re-pricing of the underlying asset consisting of all the shards of the Warhols that have been tokenized, right?

1:38:43 So that’s a coin. That’s a Warhol coin. Now, then there could be a Warhol meme coin. How do the two relate? Or is it the same thing?

1:38:53 I don’t know. Thinking through. I think they’re different. So in Singapore, one of the big stories I was following was this hip hop pop star named Iggy Azalea and she has her Iggy coin mother. And so she flew over there to have a big party and she was on stage and she’s got eight million Twitter followers and she’s known for her albums and her look.

1:39:14 And now she’s got this meme coin. And look, memes come and go and celebrity memes, there hasn’t really been too many successful ones because I feel like they launch it and then they lose interest. And maybe it’s maybe like the earlier NFT market where it was just kind of an experimental cash grab. But the whole community was super impressed with her, I think, because of the party she held and the fact that she’s all in, she’s really educated and you’ve got this thing that kind of tracks somehow a personality.

1:39:42 It’s not even quantified into anything physical or real world like that shard coin. It’s kind of just an investment in them, their energy, their production, their daily memes on Twitter. It’s weird because it’s almost not physical and that becomes something that’s associated with them. And for me, it seems like maybe something that could be next and I feel like we might see more of these. But also it’s very subject to the personality of them, also the fact that maybe they have to stay alive and what they produce and maybe their moods and if they’re still supporting that coin.

1:40:18 So I don’t know what’s going to happen, but it’s definitely new territory, I think. No, no, absolutely. There are different problems, issues, challenges in our business that I wrestle with every day just like with any other business. One of them is how to maintain, because you have the overall community and then we have the sub-communities within that overall community for every artist. So how to maintain the cohesion of the overall community and also the sub-community of every artist within the Web3 context.

1:40:51 So is it a coin for that artist? That could be one solution for it. So now I’m thinking aloud here, but I think that something needs to be done in order to maintain that. And it’s not a Discord channel, that’s Web2. It has to be Web3 solution, specifically for that sub-community.

1:41:11 When it feels part of the overall art and live art community, but it has some specific affinity with the artists that they’re collecting and utility related to that place in the art universe. Yeah, that’s interesting how you think about it that way. How can I bring that community together with an asset that could be a meme coin? Again, loyalty point meme coin, yeah, what a great way to bring everyone together with something that isn’t as specific as one of those assets.

1:41:41 So yeah, could be a pretty exciting future. How do you keep your head about you when you’re involved in something so epic, so time consuming with so many people around the world? I’m just kind of curious to just find out how you just maintain your sanity when you’re on the peak of something like this, Web3, how do you do that? Well, the kids certainly keep me in line. Amen.

1:42:13 They have needs and it has to be now. Apart from that, I have certain habits, mental habits, and I think that’s helpful. One of my mental habits is that I learn something new every day. It doesn’t happen what it is. I have to feed my language habit, which is Duolingo.

1:42:36 Lots of people don’t like Duolingo. I love it because it’s the most gamified. It’s an amazingly, amazingly constructed gamified system. I learn a lot from Duolingo, not just languages, but also how they keep me coming back every single day and worry about losing a streak. Who cares?

1:42:56 But somehow I do. And assembling those XP points and it’s just unbelievable how they do it. So that’s one type of learning. You know, I mentioned my addiction to YouTube. I learn something new from YouTube every single day.

1:43:12 It could be about history. It could be about science. It could be just so much amazing stuff on YouTube. It’s just an incredible thing. But one thing or another, and it’s really become a habit.

1:43:26 I don’t force myself to do it, but it’s like I have to learn something new every day. And if I do, sort of, the day wasn’t wasted. So there is work, and then there is learning something about every day, and then there is the two kids who always have their needs. And that’s it. That’s my routine.

1:43:42 The two kids don’t care about your net worth. They don’t care about your domination of web 3. They ground you really quick, right? Very, very much so. That’s a beautiful thing.

1:43:53 Boris, how can people engage with live art, learn more about it, and take their first steps with you and the platform and get involved? Probably the best way is to follow our social media. So on Twitter, it’s Live Art X, and on Telegram as well, and on Discord as well. The website is worth checking out because it has a lot of just free stuff, right? Liveart.io, as you said, starts out with a ticker tape.

1:44:23 It starts getting you educated about art as an asset class. You can look up any artist, about 350,000 artists. You can learn whatever you want about any of them. What is their market cap? What is their market momentum as of today?

1:44:37 What things they have sold in the past? What are their values? Which auction houses and so on? So a lot of educational content as well as our games. So our Telegram game, our price guessing game, all sorts of stuff.

1:44:50 All of that is free. I would suggest that would be a good place to start getting into the ecosystem. Fantastic. So I can sign up for the Telegram game right on the website. It’s got links to the website.

1:44:58 Right on the website. Wow. One last final thought for me is that I started working on Wall Street in 93. I left all my degrees behind at MIT and went into finance. But one of the things that was there at the time was Bloomberg.

1:45:11 Bloomberg was the information source, and it was before the internet. And you had these funky little terminals. Obviously, they provided so much value because it made Bloomberg rich so he could run it to be mayor later. But it was information at your fingertips, and it changed Wall Street. Because before that, you had the government bonds, you had all these things, but nobody could really, they could never chart things or see things in real time.

1:45:33 It was a huge tool for that whole industry, and I think it moved it forward. And when I hear what you’re doing with art, honestly, you look like the Bloomberg of the art market on top of everything else you’re doing. Yes. And that’s huge. Yes.

1:45:47 And in fact, that’s the first thing that we built. So when we started with them, my design thinking was always that, OK, in order to build art as an asset class, you have to have the data layer. So we built this Bloomberg for art first, and then we built everything else on top of it. Powerful. Boris, I am beyond excited to be on this journey with you.

1:46:09 I am super bullish on everything you’re building. And again, I keep telling my team, I’m so excited about live art. So thank you for getting us involved in this amazing project. And I’m just so excited for the future and everything you’re going to build. Thank you.

1:46:23 Thank you, Brian. It was fun. It was a lot of fun, right? All right, thanks so much. Thank you.